First Majestic Posts 3Q Adjusted Loss As Silver Prices Fall
(Kitco News) - First Majestic SilverCorp. (NYSE: AG; TSX: FR) posted record production in the second quarter,although the company ended with an adjusted loss as silver prices fell, thecompany said Wednesday.
Net earnings were $5.9 million, or 3 centsper share, compared to a loss of $1.3 million, or a penny, in the same quarterof 2017. The increase was primarily due to a $15.5 million increase in deferredincome-tax recovery driven by foreign exchange, partially offset by a decreasein operating earnings which in turn were affected by a 14% decrease in silverprice, higher general and administrative expenses for integration of PrimeroMining Corp. and higher financing costs associated with the convertibledebentures issued in the first quarter.
Excluding all non-cash and non-recurring items, the company generatedadjusted loss of $6.4 million, or 3 cents per share. This was zero cents a yearago.
Revenues generated in the quarter totaled $88.5 million, a year-on-yearincrease of 43%, which the company said was primarily due to a 69% increase insilver-equivalent ounces sold.
“During the third quarter, we delivered record silverproduction, resulting in higher revenues and cash flows compared to theprevious quarter even when we experienced a nine-year low in average quarterlysilver prices,” said Keith Neumeyer, president and chief executive officer.
First Majestic said the increase in production was primarily due to afull quarter of output from the San Dimas operation, as well as increases inconsolidated silver and gold grades. Total quarterly production increased 69%year-on-year to a new record of 6.7 million silver-equivalent ounces. Totalproduction consisted of a record 3.5 million ounces of silver,35,260 ounces of gold, 4.4 million pounds of lead and 1.2 million poundsof zinc.
The company reported an average silver price of $14.66 per ounce, whichwas down 14% from the year-ago period. All-in sustaining costs were $15.12 anounce.
“Consolidated cash costs and AISC decreased nicely to $6.85 and $15.12,respectively, due to improved economies of scale and higher production from SanDimas,” Neumeyer said. “Cost-cutting efforts remain a focus of the company byreducing capital investments at our smaller mines, innovation projects, layoffsand overall curtailment of spending.”
By Allen SykoraFor Kitco News
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